According to recent filings with the SEC, ServiceMaster is considering a sale of its landscape division, TruGreen LandCare.
The company’s landscape division has been pinched by a drop in revenue, an increase in technician overtime costs and charges related to executive separations, according to its most recent 10-Q form.
As a result, ServiceMaster is “exploring strategic options relating to TruGreen LandCare, including the potential sale of the business,” the filings state.
Pat Spainhour, CEO of ServiceMaster, said this in a statement:
“Like all companies, we continuously review our businesses against competitive and financial factors to ensure we are maximizing the value of our assets for our customers and investors. Given the challenges of the current economic environment and the performance of TruGreen LandCare, our commercial landscaping business, we have decided to explore strategic options for this single business. These options could include the sale of the business, a sale of certain assets of the business or a restructuring of the business.
“While we believe TruGreen LandCare remains a valuable business with a strong management team and the potential for significant growth, we believe that all opportunities must be explored in order to best maximize this asset.
“The decision to explore strategic options for TruGreen LandCare does not impact our TruGreen lawn care business, which provides residential and commercial lawn, tree and shrub care. The TruGreen lawn care business is not impacted by this announcement and will continue to serve its 14,000 commercial customers within the United States and Canada.”
The documents, filed in mid-November, show that the company’s landscape segment – which includes landscape maintenance – reported a 7.9 percent decrease in revenue and a $5.2 million decrease in operating income for the third quarter of 2010 compared to 2009.
See the filings here.
Contract maintenance revenue was down 9 percent, and enhancement sales were down 8.3 percent, according to the filings. Sales were down, the filings go on to say, because of “contract cancellations and pricing concessions granted in 2009 and 2010 in response to the impacts of a difficult economic environment.”
With 2009 revenue of $1.3 billion, The TruGreen Cos., part of Memphis, Tenn.-based ServiceMaster, was listed as the largest company in the green industry on Lawn & Landscape's annual Top 100 list.